| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Month over Month | -0.2% | 0.7% | ||
| Year over Year | -0.7% | 0.5% | -0.4% | -0.4% to -0.2% |
Highlights
China's headline consumer price index fell 0.2 percent on the year after advancing 0.5 percent in December. The index fell 0.7 percent on the month after increasing 0.7 percent previously, but this decline largely reflects the impact of the timing of lunar new year holidays, which took place mid-February last year, but which started in late January this year. Producer price inflation data also published today showed ongoing weakness in price pressures.
Excluding the impact of lunar new year holidays, the consumer price index is estimated to have risen 0.1 percent on the year in February, indicating that price pressures at the start of the year remain very subdued. Officials have lowered their target for annual inflation this year to two percent, down from three percent previously, and have also changed the monetary policy stance from"prudent" to"moderately loose". This suggests that policy settings may be adjusted in coming weeks to support economic activity.
Today's data were were slightly weaker than the consensus forecast for a year-over-year decline of 0.5 percent in the CPI. The China RPI and RPI-P rose from plus 14 to plus 29 and from plus 10 to plus 83 respectively, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.
Excluding the impact of lunar new year holidays, the consumer price index is estimated to have risen 0.1 percent on the year in February, indicating that price pressures at the start of the year remain very subdued. Officials have lowered their target for annual inflation this year to two percent, down from three percent previously, and have also changed the monetary policy stance from"prudent" to"moderately loose". This suggests that policy settings may be adjusted in coming weeks to support economic activity.
Today's data were were slightly weaker than the consensus forecast for a year-over-year decline of 0.5 percent in the CPI. The China RPI and RPI-P rose from plus 14 to plus 29 and from plus 10 to plus 83 respectively, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.
Market Consensus Before Announcement
CPI is expected to retreat by 0.4 percent on year in February after rising 0.5 percent in January.
Definition
Consumer Price Index (CPI) is an index that measures changes over time in the price level of consumer goods and services purchased by residents, which reflects the overall changes in price level.
Description
Consumer prices account for a majority of overall inflation, which is carefully monitored by investors worldwide. Investors worldwide monitor Chinese price changes closely. A pickup in inflation could mean an increase in interest rates is in the offing from the People's Bank of China while an easing could mean looser monetary policy. The monthly CPI is broken down by 8 categories with more detail available on the following day including aggregate information by urban and rural areas and provinces.
The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.
The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.
